February 2013 – Significant Developments

February 1, 2013 | Roger McEowen

During February, there were several important and interesting developments involving agricultural law and taxation both nationally and in Iowa.  At the state level, the Iowa Supreme Court continued to issue interesting decisions on several fronts.  All of these cases are highlighted on the CALT website.  In one case, they determined (after writing for 17 pages) that an insurance policy’s language clearly precluded coverage under an additional policy that a farmer took out to ensure that he had complete coverage for loss arising from the contract growing of hogs.  They also determined that drainage tiles are not “culverts” for purposes of determining the responsible party for repair.  Then, it an incredibly lengthy opinion referencing cases from other jurisdictions and law review articles discussing other states’ recreational use statute, the court determined that Iowa’s statutory provision did not provide immunity from liability for a chaperone of a kindergarten class involved in recreational activities on a dairy farm.  But, the court wasn’t finished yet.  To close out the month, the court said that the Iowa Final Disposition Act negates a decedent’s clearly expressed intent in a will and in pre-death writings that comported with the will provision concerning where the decedent was to be buried.  Now, Iowa’s the Iowa legislature will have to determine what to do, if anything, about any or all of these decisions.

On a federal level, Senator Grasssley (R-IA) introduced the “Farm Program Integrity Act of 2013.”  The bill would put a per farm cap of $50,000 on all commodity program benefits except those associated with the marketing loan program (deficiency payments and marketing loan gains).  Those would be capped at $75,000, thereby making the combined limit $125,000 per person or $250,000 for a married couple.  Under present law, the cap for a married couple on direct payments is $80,000 and the cap on counter-cyclical payments is $130,000.  Presently, there is no cap on loan deficiency payments and marketing loan gains.  It appears that the bill tries to bar non-farmers from collecting farm program payments by requiring more than just a contribution of management by establishing a quantifiable (we’ll see) measure for active management.  The bill number is S. 281 and it was introduced on February 12.  The bill has been referred to the Committee on Agriculture, Nutrition and Forestry.